Zainul Mawji, Executive Vice President and President, TELUS Consumer Solutions.
New ideas are crucial in business, not only for growth, but also for survival. It’s a game of disrupt or die: no matter how established your organization is, if you don’t embrace disruptive ideas to evolve, new players will happily get ahead of you.
The problem is that there are a dime a dozen good ideas. Awesome ideas that are to scale are a different story. Even in a fail-fast culture, leaders must discern who is deserving of their blood, sweat, and tears, or risk the cost of precious resources. Unfortunately, there are no algorithms to tell you what a home run will be, but some entrepreneurs and business leaders seem to have an incredible intuition for when an idea will take off.
How do they see it so clearly? And is it possible to train yourself to consistently identify the ideas worth pursuing, whether it’s starting or expanding your business, hiring a partner, or developing a new product or service?
The answer, of course, is yes, but you need the right approach. I use three fundamental criteria – I call them my “trifecta” – to determine good ideas for growth. This decision framework can help you distinguish the good from the great.
Contents
1. Does it provide value your customers can’t get anywhere else?
If you’re going to invest time and resources in launching something new, it has to meet a need of as many potential customers as possible And distinguish yourself from your peers. The product or service must in any case be new and innovative. If it exists at all, you have to market it in a unique way, and it has to be difficult for a competitor to replicate.
Apart from those important criteria, the idea must have a meaningful impact on the end customer, be it their efficiency, their health or safety, or their enjoyment of life.
The real litmus test is whether it will provide enough value for customers to pay for it and stay for it? The answer must be “yes” for your idea to work and have long-term growth potential.
2. Does it add value to your business?
Even if customers will pay for your product or service, is there a clear path to profitability?
Usually a business idea should have some degree of broad appeal; if it’s too niche, it’s hard to scale and eventually get the margins it needs to be viable.
I like to put it this way: can the new company “wash its own face”? It may not have the same margins as mature core products, but the idea should have a growth profile that indicates it will stand on its own in the not-too-distant future.
The reality is that there are very few great ideas that can actually be scaled. So be selective as launching a new business requires exceptional effort. If you are not attentive, it can distract from your existing core business.
To fully support it, you must be confident that it can and will grow to profitability on its own.
Finally, the idea must create net positive social effects. This is not about tax-deductible donations; it’s about seeing the big picture. Any business is only as healthy as the economy and community in which it operates. So ask yourself: is there a way to deliver the product or service with a sustainable strategy and ensure that it makes a positive contribution to society? Will it help make the world a better place?
Demonstrating good corporate social responsibility is not just an ethical responsibility; it’s a good thing. More and more customers are now focusing their purchasing power on organizations that align with their values. The same is true from a talent acquisition and retention perspective. People want to put their energy into companies that work purposefully.
In addition, the best business ideas have a long lifespan. If you plan to stay in business for the long haul, you need to make sure your strategy is not only profitable, but also socially sustainable.
Putting the Trifecta into practice
The ideas that meet the trifecta have the best chance of success. About four years ago, my company, TELUS, was looking for new ways to use our networks. We saw an opportunity in security and home automation, but security was a maturing market – most of the people who wanted home security systems already had them and that number wasn’t growing. We took a different approach and targeted new customer segments with internet-connected home automation systems, including security cameras, app-controlled heating and lighting, garage doors with Wi-Fi – an updated version of your traditional security system.
That way we were able to offer our customers more security through smart tools that can make life at home easier. There was a clear path to profitable business growth and we continue to offer these services in various communities.
Despite being a great idea, none of this would have happened if we didn’t have a culture of embracing innovation. The willingness to disrupt the market with a new idea must be cultivated in an organization so that everyone feels empowered to bring forward innovations that have the potential to measurably impact business outcomes. It is your job as a leader to facilitate that environment by establishing a culture of respect and transparency about sharing ideas.
By using this trifecta decision framework, you can determine which small seeds can be nurtured into powerful companies.
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